Hedge fund pioneer Julian Robertson Jr. dies at 90

Julian Robertson Jr., Leading hedge fund investor, at the age of 90. For two decades, Mr. Robertson has led one of the largest and most prominent funds on Wall Street, Tiger Management LLC, posting average annual gains of about 25%. Mr. Robertson has trained and supported a number of successful managers who have become known as the “Tiger Cubs”.

Mr. Robertson suffered from heart complications and died on Tuesday at his Manhattan home, according to his spokesman.

A native of North Carolina, Mr. Robertson served as a US Navy officer before joining Kidder Peabody in 1957, becoming a director of the brokerage firm and managing its investment branch. He left in 1978 and started Tiger in 1980, launching the company with $8 million. The company’s name was derived from the term Mr. Robertson used for those he could not remember the name of, according to Daniel Strachman, who wrote Mr. Robertson’s biography. In turn, the staff called Mr. Robertson “Big Tiger”.

Using an approach that would become traditional for hedge fund traders – buying cheap stocks with a good profit outlook while betting on expensive stocks – Mr. Robertson had early success. Tiger gained 54.9% in its first year and outperformed the market as a whole in most subsequent years.

Mr. Robertson had an incredible talent for gathering data, according to Tiger co-founder Thorpe McKenzie, who retired from Tiger in the early 1980s but remains close to Mr. Robertson. In Tiger’s early days, when her portfolio consisted of probably 100 positions, Mr. Robertson would factor in Tiger’s performance the day before on his rail journey to New York City from Long Island by looking at stock prices published in the Wall Street Journal.

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“We have done many trades in options, derivatives and sometimes esoteric securities,” said Mr. McKenzie. “We would come in and the broker would say we lost 1% and Julian would say, No, we gained a quarter of a percent.”

Over time, Mr. Robertson has invested in bonds and other markets, as well as stocks. By the late 1990s, Mr. Robertson managed about $22 billion and, along with George Soros and Michael Steinhardt, emerged as the most famous hedge fund trader on Wall Street.

Then Mr. Robertson faltered. In 1999, as investors became enamored with expensive technology stocks and the markets rallied, Mr. Robertson exercised caution and Tiger lost 19%. At an annual meeting in New York’s Plaza Hotel, investors mocked Mr. Robertson about the fund’s appalling performance.

“It was awful, really awful,” Mr. Robertson Later remembered.

Tiger lost an additional 13.5% in the early 2000s. On vacation in New Zealand, a frustrated Mr. Robertson decided to break out of the hedge fund game and return the money to clients.

Mr. Robertson remembers thinking “this approach doesn’t work and I don’t understand why”. “I am 67 years old, who needs this?”

On the day he announced the move, the stocks he had avoided began to plummet and his favorites rose, beginning a crushing bear market for tech stocks that Robertson had predicted.

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Mr. Robertson never cared for a successor, but he trained and mentored a group of analysts and portfolio managers who left to start their own hedge funds, occasionally strolling with them in Idaho and Wyoming to build camaraderie when they were still in Tiger. These investors, in turn, trained others, resulting in a pool of funds that became known as Tiger Cubs and Tiger Grandcubs. They continue to manage tens of billions of dollars for clients, often exchange investment ideas and hold overlapping portfolios of securities.

Mr. Robertson has also been instrumental in developing the nascent Wall Street brokerage business, which provides financing to trading clients such as hedge funds. Help get it

Morgan Stanley

Said Rich Portogallo, co-founder of prime brokerage Morgan Stanley, in 1985.

Other notable people on Tiger Cubs include Andreas Halvorsen of Viking Global Investors; Philippe Lafont of the Quatau Department; Stephen Mandel of Lone Pine Capital; Lee Ainsley of Maverick Capital. and Charles “Chase” Coleman of Tiger Global Management. Some of these investors have become influencers, embracing significant investments in private companies before others. Mr. Robertson has also provided financial support to hundreds of other funds over the past two decades through Tiger Management, which has continued to manage his own funds.

“Julien was a legendary investor and a generous educator,” Mr. Lafont said in a statement on Tuesday. “We all feel lonely without him here.”

Some tiger cubs performed poorly. Archegos Capital Management from Bill Hwang exploded in 2021, overwhelming Wall Street banks with billions of dollars in losses. Mr. Hwang in April on charges of securities fraud and racketeering in what prosecutors said was a scheme of widespread fraud and manipulation Almost in danger The American financial system.

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At the time, Mr. Robertson told Bloomberg News: “This was a really good guy who made a huge mistake.”

An active philanthropist and environmental expert, Mr. Robertson owned golf resorts and vineyards in New Zealand and built a 5,000-acre sheep farm in the country. In 2009, He is famous for winning a tax lawsuit worth 27 million dollars He argues that he was not a New York City resident for the year 2000 and did not owe taxes.

Mr. Robertson contributed nearly $2 billion to charity during his lifetime, according to his spokesperson, including more than $250 million to fight poverty in New York City. He pledged to donate the bulk of his possessions to charity.

“He was interested in the markets to the end,” said Mr. McKenzie. “He had an extensive network of contacts that he maintained” and was receiving daily briefings from a strategist on macro developments around the world when Mr. McKenzie and Mr. Robertson spent time together last summer.

Sir Robertson is survived by his sons Spencer, Julian III, and Alexander, as well as nine grandchildren. His wife, Josephine, passed away in 2010.

write to Gregory Zuckerman at [email protected] and Juliet Chung at [email protected]

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